$1.27 billion is not for all of the outstanding stock in Renesas.
It appears that exisiting shareholders would retain some level of ownership.
However, it appears that KKR wants to have a majority ownership so that it can take control of the company.
More detail is required but KKR may have learned a lesson from the fact that it -- along with others -- paid 6.4 billion euros (about $8 billion) for an 80 percent stake in NXP and then had to write the value down to 10 percent of what they paid.

Dylan,
Question is, what options does Renesas have? Money they have received in the recent bailout is not going to last long. Most of the money will be used in retrenching people. Few months down the line, Renesas will be back asking for money. If something unforeseen strikes like earthquake or global recession, they will be in a deep rut. Banks are afraid of extending loans because they are not sure whether they will ever recover their loans. Parent companies are also not doing too well that they can keep bailing out Renesas forever. In fact, NEC itself is in need of a bailout. It is very clear that Renesas needs to implement some tough measures to survive and become a viable company in a long run. The present Japanese management is too weak for this. They need someone like Mr. Ghosn of Nissan who can see through things and do what is good for the company. In that sense, I am rather hopeful that KKR will be able to bring right set of people in the system and do the needful.

Doesn't history show that this is not a very good idea for anyone involved? NXP and Freescale have been doing well in recent years, but the companies are still saddled with a crushing amount of debt from the leveraged buyouts.